Sitara Heights (Pvt.) Limited ("Sitara Heights" or "the Company") is a private limited company incorporated in Pakistan in 2019, operating under the provisions of the Companies Act, 2017.

Sitara Heights (Pvt.) Limited specializes in the development of a diverse range of residential and commercial properties. The Company’s projects include the construction of residential communities, apartments, and various commercial spaces such as markets, multi-story office buildings, shopping centers, and restaurants. These developments aim to meet the growing demand for both residential living and commercial infrastructure, contributing to the urban landscape and economic growth.

The Company is currently involved in the following six projects:

i- 3 Jays Tower - Gulberg III, Lahore.

ii- Gold Vista - Moza Kanjraa, Lahore.

iii- Sitara Serene Tower - Gulberg III, Lahore.

iv- The Edge - Sargodha Road, Faisalabad.

v- Sitara Enclave - Sargodha Road, Faisalabad.

vi- Sitara Icon Tower - Samanabad, Faisalabad.

Mr. Khalid Riaz is the majority shareholder of Sitara Heights, owning 88% of the Company’s shares. He is followed by Mr. Fazeel Abdullah, who holds 10% of the shareholding. The remaining shares are equally distributed among other shareholders, including Mr. Tariq Wazir Ali, Mr. Tahir Iqbal, and Mr. Muhammad Ammar Ali Talat, each holding a ~0.67% stake in the Company.

The majority of the shareholding is held by Mr. Khalid Riaz, who possesses significant control over the Company. In addition to his role at Sitara Heights, Mr. Riaz also owns Gas and Oil Pakistan Limited and an oil distribution company, which further strengthens the stability of the Company's structure and provides a solid foundation for its operations.

The sponsors of the Company bring extensive industry experience, with a primary focus on the trading, distribution, and transportation of oil and lubricants to Oil Marketing Companies (OMCs) across Pakistan. The majority shareholder, Mr. Khalid Riaz, has over three decades of experience in the oil distribution and trading sector. Additionally, he has a strong background in oil transportation and operates one of the largest carriage operations in the country, offering oil transportation services to various OMCs. This wealth of experience and infrastructure expertise significantly enhances the Company's stability and operational strength.

The sponsors of the Company possess a strong financial background, supported by a portfolio of well-diversified and profitable businesses. These include Gas and Oil Pakistan Limited, which holds an "A+" rating from PACRA, and Sitara Petroleum Services Limited, which is rated "A-" by PACRA. This solid financial foundation further strengthens the Company's position and capacity for sustained growth.

The Board of Sitara Heights is composed of three members, all of whom are affiliated with the Company. Mr. Khalid Riaz serves as the Chairman of the Board, while the other members are Mr. Ammar Ali Talat and Mr. Fazeel Abdullah. At present, the board does not include any independent directors.

The Board of Directors (BoD) of Sitara Heights brings a wealth of diverse experience and expertise, particularly in the marketing and distribution of oil. The Chairman of the Board, Mr. Khalid Riaz, is a seasoned professional with over 35 years of experience in the retail and oil transportation sectors. His extensive background significantly contributes to the Company's strategic direction. He is joined by Mr. Muhammad Ammar Ali Talat, who brings valuable experience from his previous role as Director of Strategy and Business Development at K-Electric. Additionally, Mr. Talat has been responsible for overseeing Retail Engineering and Non-Fuel Revenue at Gas & Oil Pakistan Limited, further enhancing the board's strategic and operational insights.

As the Board structure is still in the process of development, there are currently no formal board committees in place. However, the Company is actively working on establishing these committees to further strengthen its governance framework.

Ilyas Saeed & Co., Chartered Accountants, serve as the external auditors of the Company. They have provided an unqualified opinion on the financial statements for the year ending June 2024.

The Company has established a well-structured organizational framework, with operations divided into three main functional areas: i) Operations, ii) Finance, and iii) Sales. Each of these core functions is further subdivided into specialized sub-units to ensure efficient management and execution. The overall operational structure and performance of the Company fall under the direct supervision of the CEO, who oversees the coordination and integration of all functional areas.

Mr. Khalid Riaz, serves as the Chief Executive Officer (CEO) of the Company, providing strong leadership and strategic direction. The executive team is further strengthened by Mr. Mazhar Abbas, who holds the position of Project Director, overseeing project execution and operations. Mr. Tariq Rasool manages Sales and Recovery, playing a key role in driving revenue and maintaining financial stability. Mr. Mudassar Shafique serves as the General Manager, responsible for the overall management and coordination of activities at Sitara Heights. Mr. Fakhar Abbas, as the Senior Manager of Accounts & Finance, is in charge of financial planning, reporting, and oversight, ensuring the Company’s financial health. Mr. Ahmed Saeed, the Project Manager for Construction, leads the planning and execution of construction projects, ensuring timely and quality delivery. This experienced leadership team collectively drives the Company’s growth and operational efficiency.

The leadership team at Sitara Heights demonstrates a high level of effectiveness, with each member bringing a wealth of experience and expertise to their respective roles. Together, this experienced team fosters a collaborative environment, positioning the Company for continued success and sustainable growth.

The top management receives daily performance reports on the Company's operations, enabling effective and real-time monitoring of activities. This proactive approach ensures that any issues are promptly identified and addressed, leading to optimal operational efficiency. Additionally, the quality of the Company's IT infrastructure, along with the scope and effectiveness of its activities, remains highly satisfactory, supporting the seamless execution of business processes and contributing to overall operational success.

The Company is committed to implementing strong internal control systems and procedures designed to maintain and enhance quality on an ongoing basis. These measures will ensure that all operations are consistently monitored, risks are mitigated, and high standards are maintained throughout the organization, fostering continuous improvement and operational excellence.

Pakistan's real estate sector contributed approximately 2.8% to the national GDP in FY23, with an estimated market size of PKR 3,364 billion, up from PKR 3,084 billion in FY22. This represents a year-on-year growth of around 9.1% in FY23. However, the sector experienced a slowdown in growth during the first nine months of FY24, with growth reducing to about 6.4% compared to 9.5% in the same period last year, primarily due to a decline in commercial property prices.

The current inflationary environment, marked by rising costs of raw materials such as steel and cement, has contributed to a slowdown in the real estate sector. Additionally, the impact of floods has resulted in construction delays and a decrease in the volume of cement sold during the affected period. Despite these challenges, the persistent shortfall of housing in the residential sector, coupled with growing demand driven by population growth, has led to an increase in property prices.

In FY24, the Company achieved a revenue growth of approximately 19%, with total revenue reaching PKR 864 million, compared to PKR 724 million in FY23. This growth was primarily driven by an increase in prices. Additionally, the Company secured customer advances totaling PKR 1,443 million for unit sales, with total sales during the period from July 2023 to June 2024 amounting to PKR 2,329 million. In the first quarter of FY25, the Company's revenue stood at PKR 216 million, reflecting continued performance.

In FY24, the Company saw a significant improvement in its gross profit (GP) margin, which rose to approximately 48%, up from around 18% in FY23. This positive trend continued into the first quarter of FY25, with GP margins further improving to about 51%, primarily driven by higher sales prices. In addition to the growth in gross profit, the Company also experienced an upward trajectory in net margins. Net margins increased to 27.5% in 1QFY25, compared to 24.3% in FY24 and a negative 8.5% in FY23, reflecting continued operational and financial progress.

The Company has announced six projects, with active work ongoing on four of them. Sitara Enclave, a newly added housing project, is scheduled to launch in February 2024, and marketing campaigns for the project have already begun. Sitara Heights has acquired land for the development of its project, Gold Vista, although construction activities have not yet begun. Looking ahead, the Company plans to launch a new project, for which the land has already been purchased in Sialkot.

Sitara Heights primarily relies on internal cash flows and short-term borrowings for managing its working capital. During FY24, the Company significantly reduced its short-term borrowings, bringing them down to PKR 8 million from PKR 169 million in FY23. This reduction in reliance on short-term debt was largely due to the Company’s ability to generate sufficient cash internally, primarily through the successful sale of units. By the end of June 2024, short-term borrowings accounted for just 0.4% of the total borrowings, a notable decrease from 7.8% at the end of June 2023.

During FY24, the Company experienced a significant increase in EBITDA, driven by an increase in revenues. This resulted in a positive EBITDA of PKR 217 million, a notable turnaround from a negative EBITDA of PKR 39 million in FY23. In the first quarter of FY25, the Company continued to demonstrate operational progress, with EBITDA reaching PKR 64 million.  

As a result of this improved profitability, the Company's coverage ratios also saw substantial improvement. The coverage ratio rose to 77.6 times in FY24 and further improved to 82.4 times in 1QFY25, compared to a negative coverage of 22 times in FY23.

The Company has historically maintained a high level of leverage in its capital structure. However, there has been a consistent reduction in leverage over time, primarily driven by ongoing repayments. As of the first quarter of FY25, the Company’s total borrowings stood at PKR 1,880 million, a significant decrease from PKR 4,379 million at the end of FY22. This reduction in debt has led to an improvement in the Company's leverage ratio, which declined to 51.4% in 1QFY25, compared to 63.7% at the end of June 2022.